Chang’s 23 Things
Ha-Joon Chang 23 Things they didn’t tell you about Capitalism Penguin 2010
Thing 1: There is no such thing as a free market
…. Good economic policy does not require good economists.
Conclusion: How to rebuild the world economy
Chang supposes that:
- The world crisis might have been much worse were it not for the Keynesian measures that were initially taken to ameliorate it.
- It is not enough to just tinker with the free market mechanisms.
He proposes eight principles to bear in mind in restructuring capitalism, including:
Capitalism is the worst economic system except for all the others. [Of those that have been tried.]
[The] market is an exceptionally effective mechanism for coordinating complex economic activities across numerous economic agents … .
Free-market capitalism … slows down the economy, leads to increasing inequality and security, and leads to frequent (and sometimes massive) crashes.
[Capitalism, yes but we need to … install a better-regulated variety. [What? How?]
We need to take ‘making things’ more seriously. [E.g., making building communities?]
[Government] needs to become more active. [In some areas, perhaps less in others. And more effective at some more stuff?]
[The] world economic system needs to ‘unfairly’ favour developing countries. [And to recognize the unfairness in the current systems.]
The criticisms of free-market capitalism seem mostly sound and significant. But I am cynical about the prospects for regulation without a deeper understanding of the issues. In democracies effective regulation would seem to depend on widespread appreciation of what is required and the possible adverse implications, and it seems to me that the development of such an understanding and appreciation should go a long way towards ‘informing’ and freeing market capitalism so as to avoid at least some of its ills. It might thus be a good idea to try to develop such understanding before putting much reliance on regulation.